That's no longer true. The three Republican appointees are turning the commission into The Little Agency That Wouldn't: wouldn't launch investigations, wouldn't bring cases, wouldn't even accept settlements that the staff had already negotiated. This is not a matter of partisan politics. These commissioners simply appear not to believe in the law they have been entrusted with enforcing.

As of April 30, 2011, the terms of five of the six current FEC Commissioners will have expired and you will be in a position to nominate five new Commissioners for the agency. By statute, none of the five current Commissioners whose terms will have expired are eligible to be reappointed.

Our organizations urge you to expeditiously exercise your powers to nominate five new Commissioners to serve on the FEC and to give the Commission a new start.  We also call on you to discard the past practice of allowing party leaders in Congress, in essence, to name the FEC Commissioners, the result of which all too often has been Commissioners who either serve partisan interests or are ideologically opposed to the laws.

Three Commissioners voted to support the FEC staff’s findings in both cases. The three obstructionist Commissioners, however, voted to reject the staff’s recommendations in both cases and thereby blocked findings that the Republican and Democratic Party committees each had committed campaign finance violations.

This is not an isolated instance. It is but one of numerous examples of a destructive pattern and practice on the part of the obstructionist Commissioners who have repeatedly blocked efforts by the FEC professional staff to enforce the campaign finance laws.

While the terms of five Commissioners will have expired as of April 30, 2011, and none of them are eligible for reappointment, all of these Commissioners will be able to remain on the Commission indefinitely until replacements are sworn in to take their seats.

Today the Campaign Legal Center released a white paper taking an in-depth look at the legal issues surrounding likely 2012 presidential candidates, who so far are calling themselves anything but that.  The white paper looks at what the laws are, which ones are actually enforced, when the $2,500 limit contribution limits kick in and how state committees and federal leadership PACs are used to skirt that limit. Finally the paper makes recommendations about what can be done to close this long-existing loophole in federal campaign finance law. 

The paper, They Claim They’re Not Ducks: Federal Campaign Finance Law and Presidential Pre-Candidacy Activity, was written by Campaign Legal Center FEC Program director Paul S. Ryan.

To read the full white paper, click here.

The executive summary follows below.

Executive Summary

 For months, reporters have been writing about prospective presidential candidates raising and spending millions of dollars through a myriad of political organizations other than presidential campaign committees (e.g., 527 organizations, state PACs, federal leadership PACs), focusing their activities in early presidential caucus/primary states, and accepting contributions in amounts that far exceed the federal candidate $2,500 contribution limit and from sources, namely corporations, that are prohibited from making contributions to federal political committees.  Remarkably, until March 3, 2011, not a single major player had admitted they were even “testing the waters” for a presidential run.

 We have all heard the adage: “If it walks like a duck and quacks like a duck, you can be reasonably sure it is a duck.”  Well these folks are walking like prospective candidates, talking like prospective candidates, but claiming they are not “testing the waters” of candidacy.  They are in denial because if they admitted what is obvious to all, that they are “testing the waters,” they would be subject to a whole set of federal rules and restrictions that they want to avoid for as long as they can.

When do the federal law candidate contribution restrictions kick in?  Federal law requires an individual who is “testing the waters” of a federal candidacy—i.e., spending money “for the purpose of determining whether [the] individual should become a candidate”—to pay for those activities with funds raised in compliance with the federal candidate contribution restrictions ($2,500 per individual donor, no corporate/union contributions).

Yet, for example, a political advisor to Mississippi Governor Haley Barbour has acknowledged that Barbour “is giving active consideration to running” for president, but Barbour is raising and spending funds through a Georgia PAC—funds that would be illegal under federal law (e.g., $25,000 corporate contributions)—to buy the Republican Party of Iowa’s voter list.  Barbour is not alone.  Mitt Romney has set up PACs in Iowa, New Hampshire, South Carolina, Michigan and Alabama and is spending millions on staff and consultants focused on early caucus/primary states.  Other prospective Republican candidates, as well as prospective Democratic candidates in past election cycles, have done the same thing.

The notion that these individuals are not spending money for the purpose of determining whether they should become candidates strains credulity, yet they continue to ignore the federal candidate contribution restrictions applicable to such activities, which amounts to a refusal to acknowledge that they are “testing the waters” of a presidential campaign.

Why does this matter?  For more than 100 years federal law has restricted contributions to candidates and the Supreme Court has consistently upheld such restrictions as vital to reducing the threat of corruption that results from unlimited contributions.  Effective “testing the waters” regulations are crucial to protecting the integrity of elections by preventing prospective candidates from accepting potentially-corrupting unlimited contributions.

However, for decades prospective presidential candidates, both Democrats and Republicans alike, have skirted candidate contribution restrictions with an astoundingly high degree of success.  Ronald Reagan opened the door to this abuse in 1977 with his “Citizens for the Republic” PAC, which he used to lay the foundation of his 1980 presidential campaign outside the candidate contribution restrictions.  By the 1988 election cycle, virtually all serious contenders for the major parties’ presidential nominations were raising money outside the candidate contribution restrictions to fund their pre-candidacy activities, prompting one member of the FEC to write in dissent to Advisory Opinion 1986-6:

In its rulings on unannounced presidential aspirants the [FEC] has, step by step, gotten itself into the absurd position that it refuses to acknowledge what everyone knows: that Vice President Bush is running for President and is financing his campaign through the Fund for America’s Future, Inc., which he organized and controls.  . . .  Only persons just alighting from a UFO can doubt that activities of these sorts, which are engaged in over a period of many months, will promote the candidacy of the founding father.  That, of course, is why so many would-be Presidents, of both parties, have created and utilized PACs of this sort in recent years.

In terms of enforcement, little has changed since 1986, but it is time for change.  After detailing the activities of some of the most talked-about likely 2012 presidential candidates in Section I, putting these prospective candidate activities in historical context in Section II, and explaining the relevant federal laws and FEC guidance in Section III, this paper offers some ideas to close this long-existing loophole in federal campaign finance law in Section IV.  Specifically, the Campaign Legal Center recommends:

1.  More rigorous enforcement by the FEC of existing regulations requiring “testing the waters” activities to be paid for with funds raised under the $2,500 per election candidate contribution limit, subject to the ban on corporate and union contributions, 

2.  Amendment of an existing FEC regulation that creates a presumption that certain activities (e.g., setting up and staffing offices in states other than the candidate’s home state) by candidates participating in the public financing system constitute “testing the waters” of a presidential candidacy, to apply to all presidential candidates and any “person” paying the expenses covered by the current regulation, not just to federal leadership PACs covered by the current rule, and

 3.  Demand honesty from prospective candidates through pointed questions by journalists and voters.  Likely 2012 presidential candidates should be asked, point blank, whether they are spending any money for the purpose of determining whether they should become candidates—i.e., “testing the waters.”  If they deny that they are “testing the waters,” they should be asked why they are traveling repeatedly and often primarily to early caucus/primary states, buying voter lists in those states, staffing offices in those states, etc.  Likely 2012 candidates should be required to explain their activities in a manner that passes the smell test.  Just because the FEC may let abuse of the law slide, does not mean that voters and journalists have to.  A little honesty is not too much to ask of those desiring to become our next president.

On Thursday, February 24, the Campaign Legal Center, along with ten other reform groups, sent a letter urging Senate Majority Leader Harry Reid (D-NV), Senate Majority Whip Richard Durbin (D-IL) and Senate Democratic Conference Vice Chair Charles Schumer (D-NY) to “exercise your Senate leadership positions to take all steps necessary to defeat any effort by Senate Republican Leader Mitch McConnell or any other Senator to kill the presidential public financing system by attaching an amendment to the FY 11 Spending Bill.”

 The letter noted tremendous appreciation for the leadership these Senators have provided previously on campaign finance and lobbying reforms, and urged the Senators to defeat efforts to destroy one of the most important reforms to come out of the Watergate scandals.

 The reform groups that signed the letter included: Americans for Campaign Reform, the Brennan Center for Justice, the Campaign Legal Center, Common Cause, CREW, Democracy 21, the League of Women Voters, the People For the American Way, the Public Campaign, Public Citizen, and U.S. PIRG.

 The full letter follows below.

 February 24, 2011

 Senate Majority Leader Harry Reid

Senate Majority Whip Richard Durbin

Senate Democratic Conference Vice Chairman Charles Schumer

 Dear Senators Reid, Durbin and Schumer,

 Our organizations strongly urge you to exercise your Senate leadership positions to take all steps necessary to defeat any effort by Senate Republican Leader Mitch McConnell or any other Senator to kill the presidential public financing system by attaching an amendment to the FY 11 Spending Bill.

 The organizations include Americans for Campaign Reform, Brennan Center for Justice, Campaign Legal Center, Common Cause, Citizens for Responsibility and Ethics in Washington (CREW), Democracy 21, League of Women Voters, People For the American Way, Public Campaign, Public Citizen and U.S. PIRG.

 Our organizations greatly appreciate the important national leadership you have provided in the past on behalf of campaign finance, ethics and lobbying reforms.

 Your leadership is now urgently needed to defeat any effort to destroy the most important reform to come out of the Watergate scandals.

 The presidential public financing system has been described by campaign finance scholar Anthony Corrado “as the flagship of public financing systems used in the United States” and as a system “designed to establish a safeguard against corruption in the political system.”

 As you know, House Republicans recently passed an amendment to the House FY 11 Spending Bill to end the presidential public financing system. Senator McConnell introduced legislation in the Senate earlier this year that similarly would kill the presidential system.

The presidential system needs to be repaired, not killed.

 The system has served the nation and presidential candidates of both major parties well for most of its existence and has protected citizens against corruption. The system also has given average citizens and small donors a major role to play in financing our presidential campaigns.

 We are facing an all-out assault on the nation’s campaign finance laws that were enacted to prevent corruption of federal officeholders and government decisions, and the appearance of such corruption.

 The assault began last year with the disastrous Supreme Court decision in theCitizens United case which, for the first time since the Robber Baron era, opened the floodgates for corporate money to directly influence federal elections and government decisions.

 The next stage of the assault came in the last Congress, when Senator McConnell led a successful filibuster to stop Congress from closing loopholes in the campaign finance disclosure laws. The filibuster blocked by just one vote the enactment of the DISCLOSE Act.

 As a result, we now face hundreds of millions of dollars in secret contributions being spent to influence the 2012 presidential and congressional races, unless new contribution disclosure requirements are put in place in time for the 2012 elections.

 The current effort to kill the presidential public financing system is the third stage of the assault on the nation’s campaign finance laws. This is not just an attack on public financing for presidential races, it is an effort to kill the whole idea of public financing as an alternative means for financing national, state and local elections.

 The ongoing assault on the nation's anti-corruption campaign finance laws must be stopped and it must be stopped now in the Senate. If it is not, the consequences for citizens will be disastrous and the assault will move forward to attack other core campaign finance laws, such as limits on contributions to candidates and parties.

 The presidential public financing system has been used since 1976 by every President, with the exception of President Obama, to finance their general election campaigns and by most candidates of both major parties to finance their primary campaigns.

 Tens of millions of citizens have participated in the political process by using the tax check-off to direct a small amount of their taxes to fund presidential elections. Many millions of citizens have also participated by providing small contributions to presidential candidates that were magnified in importance by public matching funds.

 Senator McConnell and other congressional opponents, on the other hand, would leave us with a presidential financing system that has little use for average citizens and small donors and that is dominated by influence-seeking corporate spenders, bundlers and big donors.

 President Obama has recognized the importance of preserving the presidential public financing system. In a statement issued on January 25, 2011, the Obama Administration said, “The Administration strongly opposes House passage of H.R. 359 because it is critical that the Nation's Presidential election public financing system be fixed rather than dismantled.”    

 Recent editorials in The New York Times (January 23, 2011), The Washington Post (January 25, 2011), The Los Angeles Times (January 25, 2011) and USATODAY (February 2, 2011) also have recognized the importance of the presidential financing system in calling for the system to be repaired and in opposing efforts in Congress to eliminate it.

Polls have shown widespread public support for the presidential public financing system. For example, a USA TODAY/Gallup Poll (October 28, 2008) taken at the close of the 2008 presidential election found that more than 70 percent of the public supported continuing the presidential public financing system while only 20 percent said the system should be eliminated.

We are calling on Senators to take a stand for average citizens and small donors and against influence-seeking corporate spenders, bundlers and big givers by voting to preserve the presidential public financing system.

 We strongly urge you to exercise your leadership positions and do all within your powers to defeat any effort to kill the presidential public financing system.

 Americans for Campaign Reform                   Democracy 21

Brennan Center for Justice                             League of Women Voters

Campaign Legal Center                                  People For the American Way 

Common Cause                                               Public Campaign

CREW                                                            Public Citizen

U.S. PIRG

A broad range of individuals and organizations – from organized labor and the Committee for Economic Development to former Wyoming Republican Senator Alan Simpson and Connecticut Democratic Senate candidate Ned Lamont - have filed amici briefs with the U.S. Supreme Court in support of Arizona’s public financing program for state electoral campaigns.  The Campaign Legal Center served as coordinator of amici in the case McComish v. Bennett in addition to filing its own brief with Democracy 21 and six other public interest groups.

 More than a dozen amici briefs are now posted on the Campaign Legal Center website and additional briefs will be added.

 To link to the briefs, click here.

Links Amicus Filings on the Campaign Legal Center Website

To view the Legal Center's amici brief filed on behalf of eight public interest organizations in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by the Center for Governmental Studies in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by Justice at Stake in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by the Committee for Economic Development in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by Professor Anthony Corrado, Thomas Mann and Norman Ornstein in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by Professors Panagopoulos, Enos, and Dowling and Mr. Fowler in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by Maine Citizens for Clean Elections in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by New York, San Francisco and the Counsel for International Municipal Lawyers Association in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by eight separate self-financing candidates in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by former elected officials in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by the Service Employees International Union in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by the Union for Reform Judaism in support of Respondents (Feb. 22, 2011), click here.

To view the amici brief filed by the United States in support of Respondents (Feb. 22, 2011), click here. 

 The U.S. Supreme Court on Tuesday denied certiorari in Human Life of Washington v. Brumsickle, the latest in a string of challenges to disclosure laws across the country to appeal to the High Court.  The denial leaves standing the well-reasoned and important decision of the U.S. Court of Appeals for the Ninth Circuit upholding Washington state disclosure laws that require ballot measure advocacy groups like Human Life of Washington to register and report their financial activities as “political committees.”

 “The Supreme Court’s denial of certiorari in Human Life of Washington is a strong blow to anti-disclosure efforts nationwide and signals a sentiment among a majority of the Supreme Court’s justices that the Ninth Circuit, and other courts following it, are correctly applying Supreme Court precedent in upholding effective campaign finance disclosure laws,” said Campaign Legal Center Executive Director J. Gerald Hebert.

 The Campaign Legal Center filed an amicus brief in the Ninth Circuit supporting the State of Washington’s defense of its disclosure laws and applauds the hard work of the state’s Attorney General and his staff.

 Both the Ninth Circuit and the U.S. District Court for the Western District of Washington had rejected arguments made by attorney James Bopp, on behalf of Human Life of Washington, that Washington state laws violated his client’s First Amendment rights.  Bopp has brought other lawsuits around the United States making similar arguments, with courts rejecting Bopp’s arguments and citing the Ninth Circuit’s decision in Human Life of Washington.  For example, federal district courts in Iowa Right to Life Committee, Inc. v. Smithson and Yamada v. Kuramotocited Human Life of Washington in rejecting Bopp’s motions to enjoin enforcement of disclosure laws in Iowa and Hawaii, respectively.

 The Ninth Circuit began its decision in Human Life of Washington by quoting the U.S. Supreme Court’s 1978 decision in First National Bank v. Bellotti: “[T]he people in our democracy are entrusted with the responsibility for judging and evaluating the relative merits of conflicting arguments.  They may consider, in making their judgment, the source and credibility of the advocate.”  The Ninth Circuit then went on to cite the Supreme Court’s 2010 decision in Citizens United, in which the Court upheld federal disclosure requirements by an 8-1 vote, for the proposition that government “may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether.”

 Specifically, the Supreme Court’s decision not to revisit the Ninth Circuit’s decision in Human Life of Washington leaves standing two very important pronouncements of law.

 First, applying 30+ years of Supreme Court precedent, the Ninth Circuit held that disclosure laws such as those at issue in Human Life of Washington, are subject to “exacting scrutiny”—not the “strict scrutiny” that Bopp sought—and are constitutional if they are “substantially related to a sufficiently important governmental interest.”  The Ninth Circuit concluded that Washington’s disclosure laws, like the many disclosure laws upheld by the Supreme Court over the past three decades, are constitutional because they are substantially related to the “vital” government interest of providing information to the electorate.  Importantly, the court noted that “these considerations ‘apply just as forcefully, if not more so, for voter-decided ballot measures.’”

 Second, again citing the 2010 Supreme Court decision in Citizens United, the Ninth Circuit rejected Bopp’s argument that only “express advocacy” can be subject to disclosure requirements and that Washington’s laws were unconstitutionally vague and overbroad because they encompassed so-called “issue advocacy.”  The Ninth Circuit upheld Washington’s disclosure law defining “independent expenditure” in terms of money spent “in support of or opposition to” a candidate or ballot initiative, as well as its disclosure law defining “political advertising” as mass communications “used for the purpose of appealing, directly or indirectly,” for support in any election campaign.  The Ninth Circuit, citing the Supreme Court’s decision in Citizens United, explained:

 [E]ven if Human Life’s proposed communications constitute unadulterated issue advocacy, its argument has been foreclosed by the Supreme Court’s opinion in Citizens United.  Considering the possibility of a bright-line rule distinguishing express and issue advocacy, the Court stated, “[W]e reject Citizen United’s contention that the disclosure requirements must be limited to speech that is the functional equivalent of express advocacy.”

 The Supreme Court’s denial of certiorari in Human Life of Washington gives the green light to advocates of effective campaign finance disclosure to aggressively defend existing disclosure laws under challenge by Bopp and other opponents of transparency in government, and to legislators to enact stronger disclosure laws to shine light on the recent flood of corporate dollars into U.S. elections that are being laundered through intermediaries like the U.S. Chamber of Commerce and increasingly-prevalent fly-by-night 501(c)(4) organizations formed solely for the purpose of hiding the identities of special interests trying to buy our elections.